Key facts
- The Treasury said departments will have to argue for individual projects to be considered preventive spending.
- Demos, a thinktank, identified £22bn of government costs it claimed preventive programs could have averted, in a 2023 paper.
- The Institute for Fiscal Studies reckons next year's spending review faces £27bn of spending pressures, the article said.
- The Treasury said treating preventive spending as investment under the fiscal rules is not the plan.
- Demos chief executive Polly Curtis said the system has rewarded spending on crises rather than stopping them.
UK Chancellor John Healey's budget created a new category of public spending, the Preventative Departmental Expenditure Limit, or PDEL, the Treasury said. The category ringfences budget for preventive policies ahead of a spending review next year that the Institute for Fiscal Studies has said will be tough.
The impetus came partly from No 10, according to the article, with Andy Burnham arguing that spending more upfront on issues such as rough sleeping can save the state money over time. In a 2023 paper that introduced the idea, thinktank Demos identified £22bn of costs to government that it claimed preventive programs could have averted.
"For decades, governments have talked about the importance of prevention, but the system has consistently rewarded spending on dealing with crises rather than stopping them from happening in the first place," Demos chief executive Polly Curtis said.
Healey offered few details in the budget on how PDEL will be defined, but the Treasury says departments will have to make the argument for individual projects to be considered preventive. Rough sleeping is one area it highlights. The Treasury said treating preventive spending as investment under the fiscal rules is not the plan.
The article said next year's spending review, which could take place as late as the autumn, looks tough, with the Institute for Fiscal Studies reckoning £27bn of spending pressures.